10-K

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K. [X]

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$254,992,411.

23, 2024.

Our Company

We are one of the largest integrated providers of workforce accommodations, logistics andthese facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics. We also manage development activities for workforce accommodation facilities, including site selection, permitting, engineering and design, manufacturing management and site construction, along with providing hospitality services toonce the natural resource industry. facility is constructed.

Our Develop, Own and Operate model allows our customers to focus their efforts and resources on their core development and production operations.

Using our Develop, Own and Operate business model, we provide accommodations solutions that span the lifecycle of customer projects from the initial exploration and resource delineation to long-term production. Initially, as customers assess the resource potential and determine how they will develop it, they typically need accommodations for a limited number of employees for an uncertain duration of time. Our fleet of temporary accommodation assets is well-suited to support this initial exploratory stage as customers evaluate their development and construction plans. As development of the resource begins, we are able to serve their needs through either our fleet of temporary accommodation assets, particularly for shorter term projects such as pipeline construction and seasonal drilling programs, or our open camp model or our scalable lodge or village model. As projects grow and headcount needs increase, we are able to scale our facility size to meet our customers’ growing needs. By providing infrastructure early in the project lifecycle, we are well positioned to continue to service our customers throughout the production phase, which typically lasts decades.

The initial component of our Develop, Own and Operate business model is site selection and permitting. We believe there are benefits created by investing early in land in order to gain the strategic, early-mover advantage in an emerging region or resource play. Our business development team actively assesses regions of potential future customer demand and pursues land acquisition and permitting, a process we describe as “land banking.” We believe that having the first available accommodations solution in a new market allows us to win contracts from customers and gives us an early-mover advantage, as competitors may be less willing to invest in undeveloped land in the expectation of future demand without firm customer commitments. The strength of our land banked locations allowed us to secure contract growth in our most recent Canadian lodge locations, McClelland Lake in the Canadian oil sands region and our Sitka Lodge in the British Columbia liquefied natural gas (LNG) market.

Our scalable modular facilities provide workforce accommodations where, in many cases, traditional accommodations and related infrastructure is not accessible, sufficient or cost effective. Our services help facilitate efficient development and production of natural resources found in areas without sufficient housing, infrastructure or local labor. We believe that many of the more recently discovered mineral deposits and hydrocarbon reservoirs are in remote locations. We support the development of these natural resources by providing lodging, catering and food services, housekeeping, recreation facilities, laundry services and facilities management, as well as water and wastewater treatment, power generation, communications and personnel logistics where required. Our accommodations services allow our customers to outsource their accommodations needs to a single supplier, maintaining employee welfare and satisfaction while focusing their investment on their core resource production efforts. Our primary focus is on providing accommodations to leading natural resource companies at our major properties, which we refer to as lodges in Canada and villages in Australia. We have nineteen lodges and villages with an aggregate of more than 24,000 rooms. Additionally, in the U.S. and Canada we have seven smaller open camp properties, as well as a fleet of mobile accommodation assets. We have long-standing relationships with many of our customers, many of whom are, or are affiliates of, large, investment-grade energy and mining companies.

On November 26, 2017, we entered into a Share Purchase Agreement (the Purchase Agreement) to acquire Noralta.  This acquisition (the Noralta Acquisition), which we expect to close in the second quarter 2018, will increase our capacity in Canada by 11 lodges, with over 5,700 owned rooms and 7,900 total rooms.  Please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this annual report for additional information regarding the Noralta Acquisition.

Demand for our accommodations and related services is influenced by four primary factors: commodity prices, available infrastructure, workforce requirements and competition. Current commodity prices, and our customers’ expectations for future commodity prices, influence customers’ spending on current productive assets, maintenance on current assets, expansion of existing assets and development of greenfield, brownfield or new assets. In addition to commodity prices, different types of customer activity require varying workforce sizes, influencing the demand for accommodations. Also, competing locations and services will influence demand for our assets and services.

In the Canadian oil sands region, demand for our accommodations is influenced by oil prices. Spending on construction and the development of new projects has historically decreased as the outlook for oil prices decreases. However, spending on current operations and maintenance has historically reacted less quickly to changes in oil prices, as customers consider their cash operating costs, rather than overall full-cycle returns. Likewise, construction and expansion projects underway have also been less sensitive to commodity price decreases, as generally customers focus on completion and incremental costs. Natural gas prices also influence oil sands activity as an input cost; so as natural gas prices fall, a significant component of our customers’ operating costs fall as well.

Another factor that influences demand for our rooms and services is the type of customer project we are supporting. Generally, Canadian customers require larger workforces during construction and expansionary periods, and therefore have higher demand for accommodations. Operational and maintenance headcounts are typically a fraction, 20-25%, of the headcounts experienced during construction.

In addition, proximity to customer activity and availability of customer-owned rooms influences occupancy. Typically, customers prefer to first utilize their own rooms on location, and if such customer-owned rooms are insufficient, customers prefer to avoid busing their workforces to housing more than 45 kilometers away.

A number of multinational energy companies believe there is a potential to export LNG from Canada to meet the increasing global demand, particularly in Asia, for LNG. Currently, Western Canada does not have any operational LNG export facilities. However, as of December 2017, there were 16 proposed LNG export facilities in British Columbia in various stages of feasibility assessment and project planning, although none have reached a positive final investment decision. We expect that LNG activity in Western Canada will be influenced by the global prices for LNG, which are largely tied to global oil prices, global supply/demand dynamics for LNG and Western Canadian wellhead prices for natural gas. Should our customers or potential customers decide to invest in these LNG projects, demand for accommodations over the next three years will be driven by (i) the construction of the LNG facilities on the coast of British Columbia and (ii) the construction of the related natural gas pipeline infrastructure across British Columbia. Facility construction will create demand for permanent lodge accommodations, while pipeline construction activity will drive demand for mobile fleet accommodations.

Our Australian villages support similar activities for the natural resources industry. Our customers are typically developing and producing metallurgical (met) coal and other mines which have resource lives that are measured in decades. As such, their spending levels tend to react similarly to commodity prices as those of our Canadian customers. Spending on producing assets is less sensitive to commodity price decreases in the short and medium term, assuming the projects remain cash flow positive. However, new construction projects and expansionary projects are typically cancelled or deferred during periods of lower met coal prices. During 2011 through 2013, roughly half of our occupancy was driven by construction or expansion activity, while the other half supported operation activities of resource production. Currently, our occupancy is primarily driven by production, maintenance and operating activities. With the reduction in met coal prices from mid-year 2012 to mid-year 2016, much of the demand for rooms from new construction activity has ceased, and our current and expected occupancy is primarily driven by production, maintenance and operational activity. Workforce requirements and competition in the Australian market are comparable to those in the Canadian market. New project construction activity typically requires larger workforces than day-to-day operations, where proximity and availability of customer-owned rooms influences the demand for workforce accommodations. The rise in met coal prices in the fourth quarter of 2016 and during 2017 has improved market sentiment; however, this price improvement has yet to materially improve customer capital spending. We expect that customers will look for a period of sustained higher prices before we see any significant impact on customer activity levels and the demand for our accommodations.

Our U.S. operations are primarily tied to activity in the U.S. shale formations in the Bakken, the Rockies and West Texas. Given the shorter investment horizon and decision cycle of our U.S. customers, typically on a well-by-well basis, U.S. customers’ spending activities typically react more quickly to changes in oil and natural gas prices. These spending dynamics were clearly demonstrated over the past four years. With oil prices near $100 per barrel from 2012 to late 2014, drilling and completion activity levels grew. However, as oil prices fell beginning in August 2014 and remained at relatively low levels throughout 2015 and most of 2016, activity in the U.S. reacted swiftly, with the U.S. rig count falling over 50% in six months from its peak in the third quarter of 2014. The U.S. rig count grew in 2017 and stabilized by the end of the 2017, finishing the year at 929 rigs. The Permian Basin was the biggest driver, representing 43% of the rigs in the U.S. market. Completion activity also grew, with the Permian Basin again seeing the majority of growth in the U.S. market. Unlike the Canadian and Australian markets, headcount requirements for drilling and completion activity are fairly uniform in the U.S. market. Given the U.S. market for accommodations is primarily supported by mobile camp assets, competition is primarily driven by the availability of assets and price.

For the years ended December 31, 2017, 2016 and 2015, we generated $382.3 million, $397.2 million and $518.0 million in revenues and $98.0 million, $95.8 million and $145.0 million in operating loss, respectively. The majority of our operations, assets and income are derived from lodge and village facilities that have historically been contracted by our customers on a take-or-pay basis for periods ranging from several months to several years. These facilities generate more than 75% of our revenue. Important performance metrics include average available rooms, average rentable rooms, revenue related to our major properties, occupancy and average daily rate (in local currency). “Mobile and Open Camp Revenue,” shown below, consists of our revenue related to our open camp facilities and mobile camps, as well as third party sales related to our manufacturing division. The table below summarizes these key statistics for the periods presented in this Annual Report on Form 10-K.

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Our History

Our Canadian operations, founded in 1977, began by providing modular rental housing to energy customers, primarily supporting drilling rig crews. Over the next decade, the business acquired a catering operation and a manufacturing facility, enabling it to provide a more integrated service offering. Through our experience with Syncrude’s Mildred Lake Village, a 2,100 bed facility that we built and sold to Syncrude in 1990 and operated and managed for them for nearly 20 years, we recognized a need for a premium, and more permanent, solution for workforce accommodations in the Canadian oil sands region. Pursuing this strategy, we opened PTI Lodge in 1998, one of the first independent lodging facilities in the region.

With an integrated business model, we are able to identify, solve and implement solutions and services that enhance the guests’ accommodations experience and reduce the customer’s total cost of housing a workforce in a remote operating location. Through our experiences and integrated model, our accommodation services have evolved to include fitness centers, water and wastewater treatment, laundry service and many other advancements. As our experience in the region grew, we were the first to introduce to the Canadian oil sands market suite-style accommodations for middle and upper level management working in the oil sands region, with our Beaver River Executive Lodge in 2005. Since then, we have continued to innovate our service offering to meet our customers’ growing and evolving needs. From that entrepreneurial beginning, we have developed into Canada’s largest third-party provider of accommodations in the oil sands region.

Today, in addition to providing accommodations services, we endeavor to support customers’ logistical efforts in managing the movement of large numbers of personnel efficiently. At our Wapasu Creek location, we have introduced services that improve efficiencies for customers in transporting personnel to mine sites on a daily basis, as well as in rotating personnel when crews change.

During 2015, we entered the Canadian LNG market with our latest lodge location, Sitka Lodge. Most of the Sitka Lodge’s 436 rooms were under contract through October 2017 to LNG Canada (LNGC), a large LNG export project proposed by a joint venture between Shell Canada Energy, an affiliate of Royal Dutch Shell plc (50 percent), and affiliates of PetroChina (20 percent), Korea Gas Corporation (15 percent) and Mitsubishi Corporation (15 percent). In addition, in May 2016, we were awarded a contract with LNGC to construct a 4,500 person workforce accommodation center (Cedar Valley Lodge) for a proposed liquefaction and export facility in Kitimat, British Columbia. Construction of Cedar Valley Lodge will not commence until LNGC’s joint venture participants have made a positive final investment decision (FID). The FID was originally planned for the end of 2016. However, FID has been delayed. Recent public statements by LNGC and news reports indicate that FID for LNGC is expected in the second half of 2018. Should the project ultimately move forward, LNGC activity could become a material driver of future activity for our Sitka Lodge, as well as for our mobile fleet assets, which are well suited for the related pipeline construction activity. However, there can be no assurance that LNGC’s joint venture participants will reach a positive FID or that our contracts with LNGC will be extended. Further, on July 25, 2017, Petronas and its partners announced the cancellation of their Pacific NorthWest (“PNW”) liquefied natural gas project they had planned to build in Port Edward, British Columbia. If the LNGC project, and other potential projects in the area, do not move forward, our future results of operations and our existing long-lived assets in Canada, including our Sitka Lodge, may be negatively affected, and we may be required to record material impairment charges equal to the excess of the carrying values of these assets over their fair values. As of December 31, 2017, the net book value of long-lived assets that are currently supporting, or could be used to support, potential LNG projects in British Columbia was approximately $80 million.

With the acquisition of our Australian business in December 2010, we began to support the Australian natural resources industry through villages located in Queensland, New South Wales and Western Australia. Like Canada, our Australian business has a long-history of accommodating customers in remote regions, beginning with its initial Moranbah Village in 1996, and has grown to become Australia’s largest integrated provider of accommodations services for people working in remote locations.  Our Australian business was the first to introduce resort-style accommodations to the mining sector, adding landscaping, outdoor kitchens, pools, fitness centers and, in some cases, taverns. In all our operating regions, our business is built on a culture of continual service improvement to enhance the guest experience and reduce customer remote housing costs.

We take an active role in minimizing working to minimize the environmental impact of our operations through a number of sustainable initiatives. We also have a focus on water conservation and utilize alternative water supply options such as recycling and rainwater collection and use. By building infrastructure such as waste-waterwastewater treatment and water treatment facilities to recycle greygray and black water on some of our sites, we are able to gain cost efficiencies as well as reduce the use of trucks related to water and wastewater hauling, which in turn, reduces our carbon footprint. In our Australian villages, we utilize passive-solar-design principles and smart-switching systems to reduce the need for electricity related to heating and cooling.

hospitality services span the lifecycle of customer projects, from the initial exploration and resource delineation to long-term production. Initially, as customers assess the resource potential and determine how they will develop it, they typically need our hospitality services for a limited number of employees for an uncertain duration of time. Our fleet of mobile assets is well-suited to support this initial exploratory stage as customers evaluate their development and construction plans. As development of the resource begins, we are able to serve their needs through either: (i) our fleet of mobile assets, particularly for shorter term projects such as pipeline construction and seasonal drilling programs, (ii) our scalable lodge or village model, or (iii) our integrated services model in customer-owned facilities. As projects grow and headcount needs increase, we are able to meet our customers growing needs at our accommodation facilities or with our hospitality services. By providing infrastructure support and hospitality services early in the project lifecycle, we are well positioned to continue to service our customers throughout the production phase, which typically lasts decades.

We serve multiple projects and multiplemaintain control over the supply of rooms for their project. Where customers at most of our sites, which allows thosehave chosen to own their accommodations assets, customers to share someusually subcontract the

Our business is significantly influenced by the level of production of oil sands deposits in Alberta, Canada, activity levels in support of natural resources production in Australia and oil and gas production in Canadafacility and the U.S. Our two primary activity drivers are development and production activityprovision of the hospitality services to a third-party provider, such as Civeo through our integrated services model in thecustomer-owned facilities.

Historically, oil sands developers and Australian mining companies built owned and in some cases operatedowned the accommodations necessary to house their personnel in these remote regions because local labor and third-party owned rooms were not available. Over the past 20 years, and increasingly over the past 10 years, some customers have moved away from the insourcing business model for somea portion of their accommodationsaccommodation needs as they recognize that owning accommodations and providing the related hospitality services are non-core investments for their business.

Civeo

The accommodations marketnatural resource industry is segmented into competitors that serve components of the overall value chain, but has very few integrated providers.offer the entire suite of hospitality services to customers. We estimate that customer-owned rooms represent over 50% of the market. Engineering firms such as Bechtel Fluor and ColtAmecFluor often design accommodations facilities. Many public and private firms, such as ATCO Structures & Logistics Ltd. (ATCO), Horizon North LogisticsDexterra Group Inc. (Horizon North)(Dexterra), Alta-Fab Structures Ltd. (Alta-Fab) and Northgate Industries Ltd. (Northgate) will, build the modular accommodations for sale. Horizon North,Dexterra, Black Diamond Group Limited (Black Diamond), ATCO, Royal Camp Services Ltd. and Algeco Scotsman willTarget Hospitality primarily own and lease the units to customers and, in some cases, provide facility management services, usually on a shorter-term basis with a more limited number of rooms, similar to our open camp and mobile fleetassets business. Facility service companies, such as Aramark Corporation (Aramark), Sodexo Inc. (Sodexo) or, Compass Group PLC (Compass Group), and Cater Care, typically do not invest in and own the accommodations assets, but will manageprovide hospitality services at third-party or customer-owned facilities. We believe the integrated model provides value to our customers by reducing project timing and counterparty risks. In addition, with our holistic approach to accommodations, we are able to identify efficiency opportunities for the customers and execute them. With our focus on large-scale lodges and villages, our business model is most similar to a developer of multi-family properties, such as Camden Property Trust, AvalonBay Communities, Mid-America Apartment Communities, or a developer of lodging properties who is also an owner operator, such as Hyatt Hotels Corporation or Marriott International, Inc.

applications.

customer-owned and competitor-owned rooms influences the rental demand of our rooms in the Canadian oil sands region. Typically, customers prefer to first utilize their own rooms on location, and if such customer-owned rooms are insufficient, customers prefer to avoid busing their workforces to housing more than 45 kilometers away.

adversely affected.” of this annual report for further information.

During the year ended December 31, 2017, over 85% of our Canadian revenue was generated by our eight major lodges.

During as well as for our mobile assets, which are contracted to serve designated portions of the related CGL pipeline construction activity. The majority of our contracted commitments associated with the CGL pipeline project were completed in the fourth quarter of 2015, in Kitimat, British Columbia, we built 436 rooms during the initial development of our Sitka Lodge. Most of these rooms were under contract through October 2017 to LNG Canada, a large LNG export project proposed by a joint venture between Shell Canada Energy, an affiliate of Royal Dutch Shell plc (50 percent), and affiliates of PetroChina (20 percent), Korea Gas Corporation (15 percent) and Mitsubishi Corporation (15 percent). The initial phase of this location features catering services and recreational facilities and the ability to expand should demand for rooms in the region warrant.

In addition, we were awarded a contract with LNGC to construct a 4,500 person workforce accommodation center (Cedar Valley Lodge) for a proposed liquefaction and export facility in Kitimat, British Columbia. Construction of Cedar Valley Lodge will not commence until LNGC’s joint venture participants have made a positive FID. The FID was originally planned for the end of 2016. However, FID has been delayed. Recent public statements by LNGC and news reports indicate that FID for LNGC is expected in the second half of 2018. There can be no assurance that LNGC’s joint venture participants will reach a positive FID or that our contracts with LNGC will be extended.

Our Alberta open camps service the Athabasca and Peace River oil sands, as well as conventional and shale play oil and gas developments and infrastructure expansions. Geetla Lodge services the Horn River Basin in British Columbia.

Rooms in our Canadian Open Camps

Catering and Facilities Management

We have experience in the management of third-partycustomer-owned facilities. Historically, this has been primarily focused around natural resource production relatedproduction-related housing facilities that are owned by producers. Currently, we operate camp facilities for third-party customers.oil production companies. The facilities we manage typically range anywhere from 200500 to 3,0001,500 rooms. We are able to customize our service offeringofferings depending on our client’scustomer’s needs. Facilities managementHospitality services can be performed on an end-to-end basis with catering,food service, housekeeping, maintenance and utility services included or in segments such as cateringfood service only.

Recently, we have engaged in developing a non-energy related catering brand. This diversification initiative targets catering and facility management opportunities outside of the energy sector, including educational, entertainment, healthcare and traditional catering events. Currently, we operate three non-energy Our focus on hospitality service contracts has allowed us to successfully pursue food service only opportunities. Due to our experience servicing customer-owned facilities, and we are constructing a food production facility, which will begin operations in early 2018.

this business easily fits into our overall strategy.

the mining industry in Western Australia and South Australia.

in Western Australia. During the year ended December 31, 2017,2023, our five villages in the Bowen Basin of central Queensland generated 80%47% of our Australian revenue, or 23% of our consolidated revenue. The Bowen Basin contains one of the largest coal deposits in Australia and is renowned for its premium met coal. Met coal is usedIn addition, we provide village operation and mine site cleaning services at eight customer locations in the steel making processPilbara region, which is renowned for high grade iron ore production. Our villages and demand has largely been driven by global demand for steel finished goods and steel construction materials. In recent years, growth in construction demand for steel products in emerging economies, particularly China, has slowed significantly, negatively impacting demand for the commodity. However, during 2017 demand from China for steel increased leading to improved pricing for met coal. Australia is the largest exporter of met coal in the world, in addition to being in close proximity to the largest steel producing countries in the world. Our villagescustomer-owned locations are focused on the mines in the central portion of the basinPilbara and Bowen Basins and are well positioned for the active mines in the region.

demand, as well as to provide hospitality services at customer-owned assets.

Our Narrabri and Boggabri villages in New South Wales serviceprovide rooms and related hospitality services to met and thermal coal mines and coal seam gas in the Gunnedah Basin. Our Karratha village, in Western Australia, services workforces related to LNG facilities operations on the Northwest Shelf. Our Kambalda

U.S. Market

Onshore oil and natural gas development in the U.S. has historically been supported by local workforces traveling short to moderate distances to the worksites. With the development of substantial resources in regions such as the Bakken, Rockies and Permian Basin, labor demand has exceeded the local labor supply and accommodations infrastructure to support the demand. Consequently, demand for remote, scalable accommodations has developed in the U.S. over the past several years. Demand for accommodations in the U.S. has historically been tied to the level of oil and natural gas exploration and production activity which is primarily driven by oil and natural gas prices. Activity levels have been, and we expect will continue to be highly correlated with hydrocarbon commodity prices.

U.S.Locations

U.S. Mobile Camps

Our business in the U.S. consists primarilyimpacted by oil prices, pipeline capacity, federal energy policies and availability of mobile camp assets, both in the lower 48 states, including the Rocky Mountain corridor, the Bakken Shale region, the Permian Basin region of Texas,capital to support exploration and in the Gulf of Mexico. We provide a variety of sizes and configurations to meet the needs of drilling contractors,production completion companies, infrastructure construction projects and offshore drilling and completion activity. We provide quality catering and housekeeping services as well.

Our mobile fleet is rented on a per unit basis based on the number of days that a customer utilizes the asset. In cases where we provide catering or ancillary services, the contract can provide for per unit pricing or cost-plus pricing. Customers are also typically responsible for mobilization and demobilization costs.

Open Camps

We had two open camps in the U.S. comprised of 561 rooms as of December 31, 2017. We sold our Three Rivers location in January 2016 and closed the Stanley House location in March 2016. Our Killdeer Lodge, which we opened in October 2013, provides accommodations support to the Bakken Shale region in North Dakota. Our West Permian Lodge supports the Permian Basin in West Texas.

Modular Construction and Manufacturing

Our Canadian segment includes the design, engineering, production, transportation and installation of a variety of modular buildings, predominately for our own use. As of December 31, 2017, we owned one modular construction and manufacturing plant near Edmonton, Alberta, Canada. During the fourth quarter of 2017, we made the decision to sell this plant due to changing geographic and market needs. In line with our Australian and U.S. strategy, we are now subcontracting modular construction from third-party manufacturers for our Canadian business. In Canada, we continue to retain a staff of experts who have designed and delivered large and small modular construction projects. We are capable of taking highly replicable and well-designed manufactured buildings and our expertise in site layout, combined with site-built components including landscaping, recreational facilities and certain common facilities, to create a comfortable community within a community. We design accommodations facilities to suit the climate, terrain and population of a specific project site.

While we traditionally focused our manufacturing efforts on our internal needs, from time to time we have sold units to third parties. Revenues from the sale of accommodation units to third parties has been a small portion of our revenue and is included in “Other Revenue” in our Canadian and U.S. segments. We have not historically sold units to third parties in Australia.

We also provide support to local community groups through sponsorship and in-kind contributions to local events and initiatives. In addition, all of our food suppliers are Australian companies and, where possible, are based locally. Through our membership with Supply Nation, a non-profit organization committed to supplier diversity and Indigenous business development, we directed approximately A$12.3 million in 2023, compared to A$9.5 million in 2022, into Indigenous-owned and operated companies, and we are always looking for more opportunities to partner with these businesses.

In the U.S., we primarily offer our open camp and mobile camps accommodations and compete against Stallion Oilfield Holdings, Inc., Target Logistics Management LLC (a subsidiary of Algeco Scotsman Global S.a.r.l.), HB Rentals (a subsidiary of Superior Energy Services) and Black Diamond.

As of December 31, 2017, we had 7,034 roomshospitality services under contract, or 41% of our rentable rooms. The table below details the expiration of those contracts:

contracts with terms that most often range from several months to twelve years. The contracts expire throughout the year,, and for many of the near-term expirations, we are in the process of negotiating extensions or new commitments. We cannot assure that we can renew existing contracts or obtain new business on the same or better terms, if at all.

Employees

our greatest resources. As of December 31, 2017,2023, we had approximately 1,7001,600 full-time employees and approximately 1,000 hourly employees on a consolidated basis, 72%47% of whom are located in Canada, 20%

2023.

Federal Regulatory Reforms

In 2017

Federal

To ensure that it meets its INDC commitments under the Paris Agreement, the Canadian federal government may elect to impose further regulation on GHG emissions and may wish to enter into equivalency agreements with provinces to establish a consistent regulatory regime for GHGs. This may result in increasedadditional costs or liabilities for our customers’ operations.

Provincial Climate Change Regulation

Climate changeCEPA now recognizes that every individual in Canada has a right to a healthy environment. The Government of Canada must now take into consideration this right, including the principles of environmental justice, when making decisions under CEPA, including its regulation can also take place atof greenhouse gas emissions in Canada. Within two years, the provincial level. For example, in 2015 Alberta announced a new Climate Leadership Plan (CLP). The policies set out in the CLP contemplateGovernment of Canada must develop an implementation framework on how this right will be upheld while administering CEPA. Until that framework is developed, there is significant uncertainty regarding how these changes to CEPA will be implemented, and their potential to affect our customers' operations.

The CLP also proposed introducing a broad economy-wide levy on GHG emissions from the combustion of fossil fuels, subject to limited exceptions. In May 2016, Alberta passed the Climate Leadership Act, implementing the broad economy-wide levy on GHG emissions contemplated in the CLP. Under that Act, all fuel consumption – including gasoline, diesel, and natural gas consumption – is subject to a carbon levy. Alberta's carbon levy was set at $20 per tonne in 2017 and increased to $30 per tonne effective January 1, 2018. The increase in the carbon levy will addframework established by GGPPA. Increases to the cost of most fossil-based fuelsTIER Regulation credits and annual benchmark tightening rates may result in additional costs for us andor liabilities for our customers.

operations near caribou habitat.

The Government of Manitoba recently announced its intention to implement a carbon tax asaging infrastructure.

Finally, it should be notedadditional costs or liabilities for our customers’ operations.

Alberta’s Electricity Market

On November 3, 2016, Alberta released the details of its Renewable Electricity Program (REP) which includes a procurement process for renewable generation as part of Alberta’s CLP, which in addition to phasing out coal, includes a commitment to achieve 30 percent renewable generation by 2030. A total of approximately 5,000 megawatts (MW) of renewable generation is expected to be procured. The first procurement process concluded in December 2017. Alberta procured almost 600 MW of wind generation capacity, achieving the lowest price in Canada. Details regarding the next procurement process have not yet been released.

Alberta also announced on November 23, 2016 that it would restructure its electricity market to include a parallel capacity market by 2021. The capacity market is still in the design phase, with the first procurement process set to begin in 2019Energy Resource Activities Act and the first contractsDormancy and Shutdown Regulation. The regulation sets timelines for restoration and imposes requirements for decommissioning, site assessment, remediation and restoration. Like in Alberta, British Columbia’s Orphan Site Reclamation Fund is a levy on oil and natural gas producers that is used to be awardedpay the cost of restoring orphan sites in 2020/2021.

There is still uncertainty regarding implementingBC. If or when applicable to operations, any changes to the REP, notwithstanding the low prices achievedBCER’s approach to managing dormancy and closure requirements for energy resource activities may result in the first auction, and Alberta’s new capacity market, which may increaseadditional costs to us andor liabilities for our customers.

customers’ operations.

industry.